Hi Ox, I think I need to walk back my statement regarding this current U S Equity market compared to 1999-2000
It is significantly different in we numerous stocks trading at 120 times revenue such as the B2B stocks such as Ariba and Commerce One etc. We are also not witnessing hundreds of stocks that are trading with no earnings and selling based on website hits and ads with a guy talking about an internet stock while a cannon shoots various animals out of a cannon onto a tilted trampoline. The yield curve did invert in early 2000.
Now we still have zero - .25 range Fed Funds rates and the most unusual aspect of negative interest rates in the most solvent countries in north Europe. (Switzerland, Sweden,)
global-rates.com
Note: at this time the FED has adopted an interest rate range of 0% to 0.25%. Federal Reserve System (FED)The central bank of the United States is the FED. FED stands for Federal Reserve System but this is also referred to as the Federal Reserve for short. Although the FED is an independent government institution, the American central bank is owned by a number of large banks and therefore not by the state. The main governing body of the FED is the Board of Governors which consists of 7 members who are appointed by the President of the United States. In addition to the national FED there are 12 regional Reserve Banks. 5 representatives of these regional reserve banks together with the 7 members of the board of governors make up the FOMC (Federal Open Market Committee). The primary responsibility of the FOMC is to supervise open market operations through monetary policy. One important responsibility of the Federal Reserve is to safeguard the stability of the United States’ financial system. The FED also has various other functions, including: - ‘managing’ the national money supply by means of monetary policy with the aim of:
- supervision and regulation of the private banks;
- strengthening the United States’ position in the global economy;
- preventing or resolving banking panics.
Federal funds rateWhen reference is made to the US interest rate this often refers to the Federal Funds Rate. The Federal Funds Rate is the interest rate which banks charge one another for 1 day (overnight) lending. This American base rate is set by the market and is not explicitly laid down by the FED. By withdrawing or adding funds to the money supply the FED tries to bring the effective federal funds rate into line with the interest rate that it is striving for. If the FED’s monetary policy alters the base rate, that usually affects the interest rate on various products such as mortgages, loans and savings.
This page shows the current and historic values of the FED’s Federal Funds rate.
Possibly this is closer to a nifty 50 type market that we had in 1972-73........??
we certainly have the FANG market where FB, AMZN, NFLX, and Google have made headlines by marking their principle owners 7 and 10 billion dollars of paper profits upon the latest earnings. GPRO and AMBA
have certainly been volatile with GPRO already showing in its chart that it will likely become a commoditized business.
AMBA is my pick of the week for a stock that can be shorted at a potential double top at 128 in June and 129 on Thurs and closing at 124 and change...... one can put a very tight stop at 132.75 or 135.55 and sell on Monday looking for decline to the 100 area at a minimum but I really expect it to go back to it's mid 70's level and the 200 dma.
(Consult your financial advisor and CPA or attorney as every individual's asset allocation suitability is unique)
One of the very large issues that faces the financial markets going forward are the underfunded pension plans for cities, municipalites, police and EMS forces, and states with even the city of Houston has just been downgraded due to the underfunding of pension plans.
This is a pernicious and snowballing problem as the extreme low interest rate environment for the past decade has made it impossible for bond portfolios to reach the expected rates of return.
Crude Oil has made a new daily momentum low on the RSI indicating lower prices to come.
This weakness in the energy complex brings global stresses to a number of companies, funds and countries.
Ray Dalio, who runs Bridgewater Associates..... the Largest and Long lived fund since 1982 now in alinement with my thinking that China is the Canary in the coal mine and there is no safe place to invest in China. A fairly historic change of view by one of the sharpest minds in the world.
Ralph Acampora has commented that the clock is ticking
The S&P 500 and Dow Jones Industrial average have been bouncing around in a tight range for the better part of 2015, but according to top technician Ralph Acampora, if the market doesn't make new highs soon, it could lead to major problems down the road. "Before talking about the current market, it's imperative to look at the market's activity since March of this year," Acampora said Tuesday on CNBC's " Futures Now." Since the start of March, the market is virtually unchanged. "We saw several instances when the leading averages registered new highs, but only for a few days before selling off again."
The S&P 500 hasn't made a new closing high since May 21.
Read More S&P 500 flashes cautionary signal
For Acampora, who is unofficially called the Godfather of Technical Analysis, these failed rallies have brought about a lack of leadership.
"If we don't see new highs, it falls into this category that we're churning just like we did the last five months, and leadership is very narrow here," said Acampora. "Current leadership is in consumer discretionary and staples, financials, health-care and select technology sectors,
but it's very, very narrow."
In addition to the lack of new highs, Acampora turned to the classic technical indicator that could be flashing a "caution" sign: the Dow Theory.
"While the Dow is going sideways and attempting to make new highs, transportation is rolling over. That's not a good sign," said Acampora, director of technical analysis at Altaira Limited.
Despite his concerns, Acampora is sticking to his year-end target of 2,250 to 2,300—for now. "I have to stress, we need new highs or I'll have a problem later on," he added
I actually have realized that it was not good to have been giving more significance to the Transportion index trending higher so strongly last year..
it has now looked nasty for months.
From a time cycle and window perspective the September 28th continues to be a very significant date. I have been of the viewpoint that the global markets would be under a serious amount of selling pressure by that date. That another type of Lehman or LTCM... Penn Square...the failure of the bank of Austria in 1931........
John |
